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Brislin Company has four operating divisions. During the first quarter of 2017, the company reported aggregate income from operations of $211,600 and the following divisional
Brislin Company has four operating divisions. During the first quarter of 2017, the company reported aggregate income from operations of $211,600 and the following divisional result Division IV $245,000 $197,000 $504,000 $450,000 Sales 200,000 Cost of goods sold 191,000 301,000 249,000 Selling and administrative expenses 72,400 63,000 58,000 50,000 Income (loss) from operations (27,400) S (57,000) $145,000 $151,000 Analysis reveals the following percentages of variable costs in each division II IV Cost of goods sold 73 91 82 75 Selling and administrative expenses 39 59 50 61 Discontinuance of any division would save 50% of the fixed costs and expenses for that division Top management is very concerned about the unprofitable divisions (I and II). Consensus is that one or both of the divisions should be discontinued Your answer s correct. Compute the contribution margin for Divisions I and II. (Enter negative amounts using either a negative sign preceding the number e g. -45 or parentheses e.g. (45).) Division I Division II Contribution margin 0764 3980 M Your answe s correct. Prepare an incremental analysis concerning the possible discontinuance of Division I, (Round answers to 0 decimal places, e.g. 1525. Enter negative amounts using either a negative sign preceding the number e g. -45 or parentheses e,g, (45).) Continue Eliminate Increase (Decrease) Contribution margin 076 7076 Fixed costs Cost of goods sold 400 7000 700 Selling and administrative 20B Total fixed expenses Income (loss) from operations 2740 49082 2168 Your answer is correct. Prepare an incremental analysis concerning the possible discontinuance of Division II. (Round answers to o decimal places, e.g. 1525. Enter negative amounts using either a negative sign preceding the number e -45 or parentheses e.g. (45).) Contribution margin 1398 398 Fixed costs Cost of goods sold 595 59 Selling and administrative Total fixed expense ncome (loss) from operations 21510 5700 $3549 MYour answer is correct. What course of action do you recommend for each division? Division ntinued
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